Buying a Home from a Global Perspective

by ETF Base on December 17, 2011

When buying a home, it’s reasonable to imagine that most people consider things like finances, budgeting, location, finding a trustworthy agent, getting a mortgage, dealing with movers. All these things make up the localized tasks that are a necessary part of the process. And while obviously such things must be dealt with, I’d like to entreat us all to take a step back and consider home buying, not just for how it affects the individual, but how it impacts — and is impacted by — the rest of the world.

As an exercise, let’s consider home buying in the macro scale, not the micro. The US’s recent sub-prime crisis has caused a sea change within the financial services sector, which has directly led to a closer look at global regulation. We’ve seen governments react in different ways to the economic downturn; most have introduced austerity measures while some tried to stimulate their economy to combat deficits.

The US has applied stimulus measures, growing public works and providing cash gifts to consumers in an effort to encourage spending. Yet it’s no surprise that according to Genworth Financial’s International Mortgage Trends Report “More than half of Americans surveyed are nervous about how the economy will perform in the coming year.”

However much planning for our economic futures we try to do, there are innumerable external factors that will affect us. Because the sub-prime crisis had such a profound affect on the global economy, and because home ownership is one of the fundamental rights that humans strive for, it’s interesting to consider how people across the globe are currently venturing into the home buying market. Home ownership is not solely an American Dream. And the state of an individual’s personal finances is an overarching fear across the globe.

There are shared socio-economic trends across the world, yet there are a wide variety of environmental, economic and cultural differences that touch homebuyers locally. Homebuyer confidence is shaped by all these elements.

According to Genworth’s study, people in the US are still worried about the price of real estate falling. It’s harder and harder to buy a home. On average, the age at which a borrower is able to purchase their first home has increased from 27.3 years during the 1970s to 31.6 years in the last decade. However, it’s not all dire news. The majority of people across America are feeling that now is a good time to buy a home. Americans

also feel that private mortgage insurance helps them buy a home with a smaller down payment, allowing them to achieve their dreams even sooner.

The important thing to remember is that we we’re all in this together.

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